Bank of Burlington v. Durkee

| Vt. | Jan 15, 1829

Hutchinson, J.

delivered the opinion of the court; The plaintiffs have brought their action upon a note of ‡2000, and the defendants contend, that the note is void by reason of usurious, interest, taken at the time the note was discounted at the bank.— The question presented in the case is, whether the County Court correctly excluded the testimony by which the defendants would prove the usury ? The counsel, in presenting authorities and commenting upon them, have extended their views to matters supposed to exist, and not technically within the case, nor noticed on their briefs. The case calls our attention to the testimony-offered and excluded. The counsel have slightly noticed some matters that might have come in to rebut, if the testimony of the defendants had been admitted. We understand the subject may probably be up in various shapes, and have no objection to expressing our opinion, as far as formed, upon all that has been reached in argument. It appears, that tire interest taken upon $2,000 for 64 days, was $21,33. That amounts to 29 cents more than if cast for such a portion of a year, as 64 days bears to 365 days. The extra interest amounts to a little less than one day’s interest upon the whole sum. It was suggested in argument, that a legal cast of interest upon the note, as it now stands, would operate like applying the interest retained on the day of discount to the first 64 days from the date of tho note. But the same testimony, that shows any interest paid, shows it paid as and for the interest for the 64 days from the day of the discount, and that this so appeared upon the books at the bank. This excludes the

first week of the note from the Cast of interest, and the contract about interest altogether.

The statute upon which this defence is predicated, first prohibits the taking, in any of the ways that can be thought of, more than six dollars for the forbearance of $100, for one year, and so after the same rate for a greater or less sum, or, for a longer or shorter time ; and then makes void all securities in any way affected by such usurious interest. This is nearly copied from the English statute, as it relates to the expressions which create the forfeiture-‘‘Take by corrupt bargain,” &c. are not the words used. Yet this branch must be so construed as if those words were used. A man rhust not sustain such a loss as the forfeiture of his whole note,because it is too large by a mere mistake, or because he takes or includes as interest too much by mere mistake. The proper remedy for such an evil is, to deduct the excess,and let the just amount be recovered. This has been the uniform construction of the English statute, and must be the construction of every penal statute. There must not only be an act done, but it must be done intentionally and in opposition to the statute.

Hence the question of usury is necessarily divisible. The first point to be ascertained is, whether too great interest has been ta-' ken or secured. The next is, whether it was done corruptly, or, in other words, with intent to violate the statute. Both these are questions of fact to be decided by the jury. In the case cited from Cowen, the court seem to decide the whole; but on reading the state of the case, we find it details the statute at large; then recites the agreement of the parties, that a verdict betaken, and a case be made, or those facts turned into a special verdict. As the court decided without such case, or special verdict, in form, it is presumed that detail of facts was considered the case as if agreed in form. The court, in that case, decide, and intend it shall be so understood, that the taking of interest according to the longjestablished custom of the banks, treating ninety days as the fourth part of a year, and so of other fractions of a year, is usurious, and that the usage does not prevent this taking of interest from destroying the note.

Wc are not prepared to go this length, it is giving a statute severely penal, that liberal or extended construction, Which belongs only to remedial statutes. If a bank commences and cat-ties on its operations in a way pursued by all the banks in the country, and the way that has been pursued by them for thirty years, and even from the first establishment of banks in this country ; and uses the same tables for casting interest, or, to speak more properly, fakes the interest from those tables already cast, for any sum and any term of time, those s'ame being printed tables* and kept for sale for the accommodation of banks and business men; and, during all this time, this mode of casting and taking interest has been acquiesced in as correct, and no resistance made to it in any of the numerous actions, in which the defence migh'f be made if good in any case^ — under all these circumstances it cannot be presumed that they acted with any intention to oppose or violate the statute. In such a case, the bank would have reason to believe, that the statutes of usury had received a construction from the bench that sanctioned this mode of casting interest, or at least, that it received the universal approbation of mankind. The going in a path so Well understood, so long in use, and in such general use, precludes all presumption of any intention to evade the statute, or do any wrong whatever.

These observations are elicited by the authority cited from Cowen, and the remarks Of counsel upon that authority, arid not from any facts in the case. Such facts, as above referred to, might come in as rebutting testimony, on the part of the plaintifls, to a prima facie case of usury exhibited by the defendants. The testimony of the defendants, being rejected, in this case, there was rio use for such rebutting testimony, nor is it in the case.

The mode of computing time, in a case like the present, is as contended by the defendants’ counsel: that is, exclude thejday on which the note is discounted, and on which it ought, for this purpose, if not every other, to be considered as delivered. It being discounted the ]6th, any time on the 17th, without regarding the fractions of that day, there would be one day’s interest: and so on through the whole sixty-four days. Upon this mode o^ computation, the plaintiffs took, as interest upon $2000 for sixty-four days, twenty-nine cents too much : that is almost, but not quite, one day's interest upon lcing the interest in advance is, in one sense, taking excessive interest, because it gives to the plaintiffs the use of the interest thus taken during the period for which it is taken. But this is scarcely contended to create usury, it has been so long a'time sanctioned by judicial adjudications. See said case in Cowen; also see Cowp. R. 115; also 3 Com. Law Rep. p. 95 in note. But the taking of the twenty-nine cents,as abovementioned, is a taking of more than the six per cent, allowed by the statute; and that sum ought at least to be deducted in making up the judgment. The same being taken as excess of interest,and taken corruptly and against the statute, would constitute usury and avoid the note. The taking it deliberately and understandingly, realizing that it was an excess of interest, would be prima facie usury ; and would need to be rebutted by such circumstances, as are now alluded to, of that long and settled practice which renders the taking consistent with good intentions, and a well grounded suppo sition of obedience to the laws.

Pomeroy and Adams, for the plaintiffs. Van Ness and Men, for the defendants.

These premises lead to the necessary conclusion, that the testimony offered and rejected ought to have been admitted, as proper to present a prima facie defence of usury, liable, however, to be met, and done away, by such facts as both parties seem to suppose have existed : and even then, it ought to have the effect to diminish the judgment twenty-nine cents. It will be remembered that nothing of the rebutting evidence is incorporated into this case. There were interest tables used, of the only kind known to the cashier; but, for aught shown in the case, they were constructed -bjr the plaintiffs, for their own use, and were never used nor approved by any other bank whatever.

If the parties wish to present the question to the jury, after the views of the court now expressed, in which we are well agreed, there must be a new trial of the cause. The defendant’s counsel informed the court that they should insist upon another trial if they were entitled to it.

By the court — Let a new trial be granted.